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The Montgomery County Police have confirmed with EW that authorities have shot down the gunman who took three people hostage at Discovery Channel’s corporate headquarters today in Silver Spring, Md., and the Associated Press is reporting that he subsequently died. All hostages escaped, and are now safe.

According to Corporal Dan Friz, an explosive device might have detonated during the ordeal: “There was a minor detonation of it, but luckily no injuries to anybody,” he told EW. Back in 2008, Lee was arrested for disorderly conduct in front of the building after he led a protest against the network. His motives apparently stem from his efforts to save the planet. On a website registered to Lee, a statement criticizing the network was posted in January 2008: “These guys have been very sneaky and deceptive as to their contribution to the planetary problems. Just look at their ‘new’ show about saving the planet, Planet Green, to me, it’s just another show about more PRODUCTS to make MONEY, not about actual solutions. We can’t let them get away with doing it anymore.”

LAHORE, Pakistan — The triple bombing of a religious procession in Pakistan adds to the strains on a government already struggling with devastating floods and shows that Islamist militants are back in business despite the natural disaster.

The death toll in the blasts rose to 35 on Thursday, with about 250 injured, government official Sajjad Bhutta said.

The bombs late Wednesday ripped through a Shiite Muslim street procession in the sprawling city of Lahore, which has been frequently targeted by Sunni extremists over the last two years, often in coordinated attacks on religious minorities.

Sunni extremists have launched dozens of attacks against Shiites and other Islamic sects and religions in Pakistan in recent years. The extremists believe it is permissible — even honorable — to kill members of other faiths.

Allied with al-Qaida and the Taliban, the militants are also seeking to destabilize Pakistan's U.S.-backed government through such attacks. They have created sanctuaries in the rugged northwest close to the Afghan border where they plan and train.

The bombings were the first major attack in Pakistan since floods ripped through much of the country more than a month ago, leaving more than 8 million people in need of emergency assistance and prompting a major international relief effort that is still ongoing.

"While the whole nation is distressed with the sufferings of flood affectees, these terrorists are involved in promoting their own agenda," Prime Minister Yousuf Raza Gilani said in a statement condemning the blasts.

The bombs hit three separate sites as 35,000 Shiites marched through the streets of Lahore in a traditional mourning procession for the caliph Ali, one of Shiite Islam's most respected holy men.

The first blast was a smallish time bomb that exploded in the street near a well-known Shiite building.

Minutes later, a young-looking suicide bomber tried to force his way into an area where food was being prepared for the marchers to break the traditional Ramadan fast and blew himself up, said senior police officer Zulfiqar Hameed. Soon after, another suicide bomber detonated himself at an intersection near the end of the procession.

Senior Shiite leader Agha Syed Hamid Ali Shah Moosavi demanded more protection, but said his community would never stop organizing yearly processions for Ali.

"We can sacrifice our life, but can not allow mourning processions to end," he said.

Pakistan was slow to recognize what army officers now say is the existential threat Islamist militants pose to the state. But over the last two years and amid heavy U.S. pressure, the army has been fighting the insurgents in different parts of the northwest.

They have had some success, but the militants have proved a resilient enemy.

Pakistan army jets and helicopters targeted militant hide-outs in two border regions on Tuesday and Wednesday, killing 60 people identified as insurgents or their family members, including children, said security officials and a witness.

There was no independent confirmation of the casualties because the area is too dangerous for outsiders to visit.

The raids Tuesday took place in several villages in Teerah Valley in the Khyber region and killed 45 people, the officials said. One official said some vehicles rigged with explosives had also been destroyed. He could not say how many.

Associated Press Writers Hussain Afzal in Parachinar and Riaz Khan in Peshawar contributed to this report.

Sept. 2 (Bloomberg) -- Thailand’s central bank will closely monitor the baht and watch out for speculation in the currency, Governor Tarisa Watanagase said today, adding that the current measures are still sufficient.

Thai Baht

The baht has strengthened quickly since the second half of August because it is “catching up with other currencies” after the country’s political turmoil ended, she said.

“Our job is taking care of the volatility,” she said. “We don’t want exporters to lose competitiveness, but we are in the middle of the region” and there are many outside factors, she said. The central bank will be “more careful,” she said.

Tarisa declined to say if there is any speculation in the baht now.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

Automakers and analysts expected August auto sales to look bad compared to last August's figures, which were inflated by Cash for Clunkers. But last month was even worse than predicted.

The auto industry turned in its worst August for U.S. sales in 28 years.

While Cash for Clunkers skewed the year-over-year comparison, Jesse Toprak, vice president of industry trends for TrueCar.com, raised concerns that August U.S. auto sales totaled fewer than 1 million vehicles, down from slightly more than 1 million in July, when historically the two months tend to have comparable sales.

"What's actually more worrisome is we're supposed to be on a trajectory up to recovery," he said.

One exception to the dismal sales trend was Chrysler Group, which exceeded expectations with a rise of 7 percent to 99,611 compared to last August, the company said. It's the automaker's fifth straight month of year-over-year sales increases.

General Motors Corp., the biggest U.S. automaker, said sales fell 25 percent to 185,176 from 246,479 last August.

Ford saw sales fall 11 percent to 157,503 from 176,323 a year earlier for its three main brands.

Toyota reported U.S. sales of 148,388 units, down 31 percent from last year. Toyota had benefited tremendously from the government rebate program and reported one of the industry's biggest year-over-year declines.

For August compared with July, sales fell 3 percent at Honda, 7 percent each at Nissan and Subaru, and 8 percent at Kia. All of them reported bigger drops compared with August 2009 because of Clunkers sales. August sales at Hyundai were essentially flat.

SONY IS ROLLING OUT REVAMPED VERSIONS OF ITS THREE E-READERS, AND SELLING ITS POCKET EDITION AT A HIGHER PRICE, IN A BID TO COMPETE AGAINST THE CHEAPER AMAZON KINDLE AND BARNES & NOBLE NOOK.

Amazon.com and Barnes & Noble’s strategies for conquering the e-reader market? Cut the prices of their respective Kindle and Nook devices.

Sony’s strategy for boosting its sales numbers in that same market? Raise the price of its refreshed Reader Pocket Edition, and justify it with additional features such as touch-screens and a lighter, smaller form-factor.

Sony’s new Reader Pocket Edition will retail for $179, a cost increase of $29 from its previous version. The revamped Touch Edition will cost $299, with the Daily Edition topping out the line at $299. The devices now feature slimmer and lighter bodies, more sensitive touch-screens (courtesy, apparently, of infrared sensors), and e-ink screens with higher contrast and clarity.

The question is whether those features will attract users who would otherwise gravitate towards the Kindle or Nook, both of which retail for $189. While the Daily Edition features the same sort of 3G connectivity as the Kindle and Nook, neither the Pocket Edition nor the Touch Edition offers a wireless option. Furthermore, both Amazon and Barnes & Noble sell WiFi-only versions of the Kindle and Nook for $139 and $149, respectively; that, along with recent price cuts among smaller e-readers, exerts considerable pressure for new devices on the market to be cheaper, not more expensive.

On Aug. 31, Borders President Mike Edwards told the Wall Street Journal that his company would slash the retail cost of Kobo and Aluratek Libre e-readers by $20, bringing the former to $129.99 and the latter to $99.99. Edwards reportedly insisted that the price cuts were driven less by “pricing in the marketplace” than the need to apparently offer an e-reader device for below $100.

Despite the cost- and feature-battles between e-reader manufacturers, however, their ultimate fight may be with the Apple iPad, which features an e-reader application. In July, Susquehanna Financial Group analyst Marianne Wolk suggested that Apple had likely shipped more iPads than Amazon had Kindle users. Whether that estimate is accurate—Amazon has habitually refused to release Kindle sales figures—it suggests that the rapid iPad uptake among consumers could pressure the still-nascent e-reader market in ways that affect both price and publisher negotiations.

BERLIN--In 2011, Sony plans to join the small set of companies that offers laptops that can display 3D video and games at 1080p resolution.

The company showed off prototypes of a forthcoming Vaio laptop at the IFA electronics show here Wednesday, models that come with a "3D" button and active-shutter glasses to separate what the right and left eyes see.

The 3D Vaio comes with a 3D button to set it for

use in 3D mode. Otherwise, it behaves like a normal laptop

with 1,920x1080-pixel

resolution.(Credit: Stephen Shankland/CNET)

"3D Vaios will debut next spring," Howard Stringer, Sony's chief executive, said in a press conference touting 3D technology and Sony's commitment to it. Sony also touted other 3D products and content at the show.

The protoypes shown at IFA use "frame-sequential" technology that rapidly cycles the full screen between left-eye and right-eye views, with blank screens in between each to reduce the "crosstalk" that can reduce 3D image quality.

That means the laptop must be able to display video at 240 frames per second to keep up with a 3D rate of 60 frames per second. Sony wouldn't reveal whose graphics chip is used in the system. Sony's also cautioned that the ultimate products may be different from the prototypes it showed.

IFA, like electronics shows before it, has become a showcase for 3D technology. Many people are indifferent or even hostile about the technology so far, or at least unwilling to pay the necessary premium, but it's also making steady inroads across the electronics and computing industry.

For those who want a really big screen experience, Sony announced a 3D video projector, the WV-90. It will use the same active-shutter system as Sony's Bravia TVs, meaning that the required glasses will work across the line.

The entire press conference was displayed live on a large screen above the stage. Sony opted to use Real D's 3D technology, which today is found in many movie cinemas. Panasonic, which also tooted its 3D horn at IFA, opted instead to use an array of 54 of its own plasma TV screens. Sony, it should be noted, also sells digital cinema projectors and high-end 3D cameras, including some used to shoot the movie Avatar.

Sony, unlike some of its competitors, is a content company. Here, the company plans to tackle 3D aggressively, too.

Sony also plans to launch its own 3D TV channel, Stringer said, with content to include natural history, children's programming, science, and motion pictures, Stringer said. And Sony Pictures plans several 3D movies soon: "Resident Evil Afterlife," "The Green Hornet," another "Spider-Man" sequel, and another "Men in Black" sequel.

"Being shot in 3D doesn't automatically guarantee success," Stringer said. "What counts is how well you tell a story. A hit is a still a hit is still a hit--except in 3D it's a bigger hit."

And then there are the staples. Sony plans to release by the end of 2010 a Blu-ray disk of highlights of the World Cup soccer tournament, Stringer said.

I LOVE awards shows. Not because of the celebrities being honored or because of the entertaining show, but because of the fashion– good and bad! As much as I love seeing stars dress in the latest designer gowns and borrowed jewels, I also love seeing the crazy outfits that some stars dare to wear. It’s like atrain wreck…I just can’t stop looking.
This year’s 2010 Primetime Emmy Awardsdidn’t disappoint in the fashion category. Eva Longoria and Julie Benz played it safe in simple yet elegant gowns, while January Jones and Tina Fey pushed the envelope with very memorable dresses. Even Kelly Osbourne was a hit and looked stunning!

My fashion flop award for the night goes to the very talented Rita Wilson. All I want to say is…R ita, what were you thinking? If you have a stylist, they need to be dismissed, and if you have friends that let you leave the house in that, they really aren’t your friends. OK, so I’m being a little harsh, but from the fit to the crazy matchy-matchy shoes, nothing from this look worked beyond the color. Of course, a slew of other nominees joined Mrs. Tom Hanks in my fashion flop category, and here they are…

Montgomery County Police confirm with EW that an armed man entered the Discovery Channel headquarters — located in Silver Spring, Md. — and is holding at least one person hostage. According to police, calls were made at approximately 1 p.m. about a man with a gun, and possibly explosives. The area has since been cleared out. Police, bomb technicians, and a SWAT team are on the scene, attempting to contact the man, who is located in the lobby.

The Associated Press reports that a person inside the building claims the man “had something strapped to his chest,” and is also holding explosives. The person also told the AP that those inside the building have been ordered to not speak to media.Other witnesses have claimed to have heard shots fired in the building.

UPDATE: According to NBC News, authorities have identified the gunman as James J. Lee, someone who is believed to have had “concerns” with the Discovery Channel, and has protested at the building in the past. He is believed to have taken “a small number of hostages,” and is speaking with police. At this point, police have not confirmed whether or not Lee has explosives on his person. Lee had been previously arrested at the site before; back in 2008, he was taken into custody after the threw thousands of dollars in the air nearby the building.

Though the new iPod will have good improvements, we take a look at other options

Apple tries to be very secretive about its new product launches but people find their way around this firewall withleaksfrom everynook and cornerof the globe. That, along with our regular analysis makes for some educated guesses about what toexpect. With the launch of the iPhone 4, we listed a fewalternativesand people paid way more attention to those than the iPhone 4 itself.Thus, we to believe that people want to know more about what else they can buy as an alternative to an Apple product. Everybody has their own reason; some dislike Apple's closed system, some can't afford their premium pricing, while a few just hate Apple in general. But you've got to admit it, they do create some innovative products that make other manufacturers work very hard to come up with a product with similar usability. It is like Apple creates a base, a platform if you will, and everybody tries to outdo the Apple product. We talked about this earlier when we wrote about5 things that the Galaxy Tab did better than the iPad.

The iPod Touch is possibly going to get great additions like a Retina display, dual cameras for Facetime and taking snaps etc. Whatever the improvements may be, one will mostly still not escape their inability to copy-paste music via a file manager. Or the need to convert/downscale videos before they can be played back on the device, or the lack of support for popular video formats like DivX and MKV. For people distressed with these and other unchangeable factors about iPods, look beyond Apple! There are many manufacturers that already have or will soon have media players that could suit your needs. Here are our top 5 alternatives to the impending iPod Touch 4

Microsoft plans to release a new Xbox 360 controller in November that features a transforming D-pad, the company announced Tuesday.

The first difference users will find with the new wireless controller is its design. Instead of a white finish with multicolored buttons, the new controller sports a gray and black finish. All the buttons are now different tones of gray.

But it's the new D-pad that will likely attract some users.

According to "Major Nelson," Microsoft's director of programming for Xbox Live who first unveiled the new controller in a blog post and video, users "are not big fans of the D-pad" on the Xbox 360 controller. To address the issue, Microsoft will now let Xbox 360 owners twist the D-pad's disc to make it more appealing to gamers. At one position, the D-pad will be nearly flush with the disc behind it. After twisting it, the D-pad is raised much higher, making it more usable for gamers.

Aside from that, the Xbox 360 wireless controller performs and works exactly the same way; the update is designed solely to give users a better D-pad.

The new Xbox 360 wireless controller will be available on November 9. It will only be offered in a bundle with Microsoft's Play and Charge kit and will retail for $64.99.

BAGHDAD — Iraq is preparing to buy as much as $13 billion in American arms and military equipment, a huge order of tanks, ships and hardware that U.S. officials say shows Iraqi-U.S. military ties will be tight for years to come.

"It helps to build their capabilities, first and foremost; and second, it builds our strategic relationship for the future," said Army Lt. Gen. Michael Barbero, the ranking U.S. officer responsible for training and advising Iraq forces.

With combat operations officially ended, Vice President Biden and Iraqi officials will gather today at a ceremony at the main U.S. base near BaghdadAirport to mark U.S. troops' transition to an advisory role that focuses on assisting Iraqi security forces. The number of U.S. servicemembers has dropped below 50,000. All U.S. forces are scheduled to leave Iraq by the end of next year.

Military sales, which often include lengthy maintenance and training contracts, are part of U.S. efforts to maintain a relationship with Iraq. About half the $13 billion in sales are finalized contracts, and the rest are still in negotiations.

The sales will make Iraq among the world's biggest customers for American military arms and equipment. The Iraq Defense Ministry intends to transform the country's degraded conventional forces into a state-of-the-art military.

"It's going to be a modern and fairly sophisticated military," Barbero said.

Part of the planned purchase includes M-1 tanks, the main battle tank for the U.S. military. Iraq wants to buy 140 of the tanks, and Iraqi crews have already started training on them.

Iraqi forces saw firsthand the effectiveness of America's M-1 tank during the Persian Gulf War in 1991, when the U.S. Army obliterated the slower and less sophisticated Iraqi tanks.

Iraq's conventional weaponry came largely from the Soviet Union and was ravaged by Saddam Hussein's war with Iran in the 1980s and the Gulf War led by the United States. The Iraqi air force was practically wiped out in the wars. Later, United Nations sanctions after the Gulf War prevented Saddam from maintaining his military.

In addition to the $13 billion purchase, the Iraqis have requested 18 F-16 Falcon fighter jets as part of a $3 billion program that also includes aircraft training and maintenance. If approved by Congress, the first aircraft could arrive in spring 2013. Under the plan, the first 10 pilots would be trained in the U.S.

Recent success in battling the Islamist insurgency has allowed Iraq to shift from a lightly equipped counterinsurgency force to a conventional force capable of securing its borders and repelling threats, Barbero said.

"They're at a point now where they're starting to make changes to focus on these conventional capabilities that they need," he said.

Sept. 1 (Bloomberg) -- Australian Prime Minister Julia Gillard won the support of the Greens Party should she form the next government in exchange for setting up a climate-change committee that would set a penalty for carbon emissions.

The Greens also agreed to work with Gillard’s Labor Party to ensure passage of the national budget, leader Bob Brown told reporters in Canberra today. His party is seeking a parliamentary debate on Australian troop deployments in Afghanistan and restrictions on political donations.

“This is a new way of working,” Gillard told reporters in Canberra. “The fact that we were able to reach that agreement shows we have worked in good faith and held good discussions.”

The deal adds an extra seat in the lower house of parliament for Gillard as she negotiates to form a government following a deadlocked national election on Aug. 21. Labor itself has so far won 71 seats in the 150-seat House of Representatives, five short of a majority

“We have signed an agreement for the continuation of the Gillard government,” Brown said. “This agreement is a replacement of both the Labor and Greens commitments to dealing with climate change.”

The accord shortened the odds on Labor retaining power although the opposition coalition led by Tony Abbott remains the favorite to form a government, according to bookmaker Sportsbet.com.au. The odds on Gillard fell to A$2.50 for each dollar wagered compared with A$3.20 before the deal. An Abbott victory is paying A$1.50, it said in an e-mailed statement.

‘Driver’s Seat’

“The Greens will be in the driver’s seat of any Gillard government,” Abbott told reporters in Canberra.

The proposed climate commission would be made up of lawmakers and scientists to advise on the best way to charge polluters for emissions. Gillard drew criticism in July when she delayed climate-change action in the world’s driest inhabited continent until after 2012.

“We have set up a process that will set up a carbon price and tackle climate change,” Brown said. “It will be inclusive and there will be other parties involved.”

With 82 percent of the vote counted, Abbott’s Liberal- National coalition holds 73 seats in the lower house to Labor’s 71 with one division still undecided, according to the Australian Electoral Commission website.

Independent lawmakers Robert Oakeshott, Tony Windsor, Bob Katter and Andrew Wilkie are in Canberra for talks with the main parties as they try to decide who to back. They are scheduled to meet Treasury Secretary Ken Henry today.

Gillard asked the independent lawmakers to release a Treasury analysis of Labor’s policies.

“We want to be transparent, we believe those costings should be released publicly,” she said.

(09-01) 04:00 PDT Sacramento - --
The Legislature, as expected, failed on Tuesday to pass either of two competing budget plans to close the state's $19 billion deficit as lawmakers debated different visions for future prosperity.
The votes demonstrated that neither the Democratic nor Republican versions of a spending plan for the fiscal year that began July 1 has enough support to pass the Legislature and go to Gov. Arnold Schwarzenegger.
As of today, the budget is 63 days late and the prospect of IOUs looms ever larger. Financial leaders at the Capitol are preparing to take measures to conserve cash so the state can pay its most important bills.
Lawmakers said they hoped the failure would lead to more serious negotiations.
State Senate President Pro Tem Darrell Steinberg, D-Sacramento, called Tuesday's debate "far overdue."
"It is a debate about the choices that confront us because, after all, governing itself is a matter of choices," Steinberg said, adding that the choice is between investing or disinvesting in the state's institutions.
Senate Republican leader Dennis Hollingsworth of Murrieta (Riverside County) said the Republican proposal, which is largely the same as Schwarzenegger's May budget plan, reflects reality.
"Yes, this is a very tough budget. Yes, it does contain significant spending reductions, but it spends what we have and doesn't ask for more," Hollingsworth said.
The votes were mostly along party lines, though two Republican senators and two Republican assemblymen voted against the Republican proposal. A few members from both parties abstained from voting. It takes a two-thirds vote of the Legislature to pass a budget, which requires a handful of Republicans to join the majority Democrats.
Schwarzenegger, speaking in San Francisco, called the votes "kabuki."
Given that the outcome was known in advance, he said, "Why they put it up for a vote in the first place no one knows."
Predicting the next step, the governor said, "I think that the legislators, Democrats and Republicans, will come back to the office and they will continue negotiating."

Dueling proposals

The Republican proposal includes the elimination of the state's welfare-to-work program, CalWORKS. That cut would make California the only state in the nation without such a program. The plan also calls for eliminating almost all child care programs. It would cut local mental health funding by nearly 60 percent.
The Democratic plan includes smaller cuts than the Republicans proposed, along with reductions in prison health care spending, state employee pay and in-home support services for the elderly and disabled. It also includes about $4 billion in revenues, including delays in corporate tax breaks and increases to the income tax and vehicle registration fees. It would also cut the state sales tax from 6 to 3.5 percent. The plan also includes shifting some of the state's current duties like juvenile parole administration to local governments.
Sen. Denise Moreno Ducheny, D-San Diego, who chairs the Senate Budget and Fiscal Review Committee, argued that the Republicans' proposed cuts would devastate private employers, such as child care providers. She said Democrats are open to other revenue ideas beyond the tax proposal.
Lawmakers did not vote on the Democrats' proposed tax increase Tuesday. Democrats said it was a procedural matter, as a tax vote would come if the actual spending plan were passed. Republicans drew no distinction and hammered their counterparts for supporting a tax increase on middle-class Californians.

More than halfway

In the Assembly, Speaker John Pérez, D-Los Angeles, said Democrats are more concerned about the ultimate outcome of the budget than the result of Tuesday's actions. He said Democrats had done their share of compromising.
"No Republican can say with any honesty that Democrats have not met you halfway," Pérez said. "We've met you more than halfway. We've done it this way, here. We did it last year. We did it the year before that. We voted for cuts that many of us thought we would have never contemplated making prior to being elected to office."
Assembly Republican leader Martin Garrick of Carlsbad (San Diego County) said the Republican plan creates a balance while making tough spending decisions.
"If my friends on the other side of the aisle think some of our spending reductions are too steep, I can understand that," he said. "All of us are having difficulty with the numbers. But if we can't perform our duties, provide the oversight, the accountability and the leadership, then we are not doing our job."

No 'great progress'

After the vote, Steinberg said he did not think "great progress" was being made on the budget. Asked if the impasse could extend to election day in November, he said it is "possible, but certainly is not my desire and not my intention."
Steinberg said he might try to change the focus of negotiations from potential cuts to the pension, budget and tax reforms that the governor has demanded.
While the legislative session has ended without a budget, the Senate Committee on Revenue and Taxation will meet today to hear a tax reform proposal from the administration. That proposal generally would lower personal and corporate income taxes while applying the sales tax more broadly to include businesses in the service sector.

SINGAPORE—China's manufacturing rebounded in August, countering weakness in some other Asian economies and suggesting the region's growth won't slow sharply later this year.

Data for two purchasing managers' indexes in China showed that factory activity grew in China, set to be the world's second-biggest economy this year, and outweighed declines in South Korea and Taiwan, where the West's sluggish recovery weighed on exporters.

Markets "will put more faith in the Chinese PMI data than some of those small regionals," said Frederic Neumann, co-head of Asian economic research for HSBC bank, which issues monthly PMI indexes for a number of countries.

China "is the elephant in the room and as long as it ekes out growth, and it does seem as if China has stabilized," Mr. Neumann said. Meanwhile, slower growth in smaller economies "will be taken as noise within the broader story, which is that Asia is not going to double-dip."

The official China PMI rose to 51.7 from 51.2 in July, its first rise in four months, the China Federation of Purchasing & Logistics said. A reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 indicates contraction.

HSBC's China PMI rebounded to a three-month high of 51.9 from 49.4. That means manufacturing returned to growth after a slight contraction in July, although the index remains almost six points below its level at the start of the year.

The data "reconfirmed our long-held view that China is moderating rather than melting down," said Hongbin Qu, HSBC's chief economist for China and co-head of Asian economic research.

"Domestic demand will be resilient," driving economic growth at about a 9% annual rate in the second half of this year and in 2011, Mr. Qu said, "while external demand is more likely to turn worse in the coming months."

Moreover, Nomura economists noted that components of the index measuring forward-looking new orders and new export orders rose.

"These two components appear stronger than the seasonality suggests, pointing to an acceleration in manufacturing activity ahead," Nomura said in a note to investors.

Data from elsewhere in Asia-Pacific painted a less optimistic picture.

In Australia, an index released by the Australian Industry Group-PricewaterhouseCoopers fell 2.7 points from July, to 51.7.

"Election uncertainty, together with intense import competition and other ongoing impacts of a strong Australian dollar, is generating headwinds for manufacturers," said Australian Industry Group Chief Executive Heather Ridout.

Still, that was offset as Australia's gross domestic product grew more than expected in the second quarter, by 1.2% from the previous three months and by 3.3% from the same period last year. Most importantly, the growth was broadly based, alleviating concerns that the mining sector alone is powering the Australian economy.

In Taiwan, manufacturing contracted for the first time in 18 months on weaker business conditions, mainly in the technology sector. HSBC's PMI for Taiwan fell to 49.2 in August from 50.5 in July.

"An increasingly murky external environment is putting a heavier onus on the island's domestic-demand engine to deliver in the second half of 2010," said HSBC economist Donna Kwok, though she expressed confidence that domestic demand would indeed prove resilient.

South Korea's index showed the sharpest decline, falling to 50.9 the weakest in 17 months from 53.2.

The lower reading for Australia could be seen as a delayed follow-through from China's July dip in manufacturing, HSBC's Neumann said.

In contrast, the declines in Korea and Taiwan show how much more exposed those economies are to the West, where growth remains sluggish, than is China, which has more capacity to generate growth internally.

"India's economy is showing no signs of cooling despite a partial withdrawal in fiscal and monetary stimulus," HSBC's Mr. Neumann said. "We think there is plenty of fire power still to come from industry, even though (year-on-year) growth may not look as stellar as in the recent past."